A LIMITED LIABILITY COMPANY (LLC) is the United States-specific form of a private limited company . It is a business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation . An LLC is not a corporation; it is a legal form of a company that provides limited liability to its owners in many jurisdictions. LLCs do not need to be organized for profit. In certain U.S. states (for example, Texas), businesses that provide professional services requiring a state professional license, such as legal or medical services, may not be allowed to form an LLC but may be required to form a similar entity called a PROFESSIONAL LIMITED LIABILITY COMPANY (PLLC).
* 1 Overview * 2 Flexibility and default rules * 3 Income tax * 4 Advantages * 5 Disadvantages * 6 Variations
* 7 International equivalents
* 7.1 Albania
* 7.2 Argentina
* 7.3 Bosnia and Herzegovina
* 7.4 Brazil
* 7.5 Bulgaria
* 7.6 Chile
* 7.7 Colombia
* 7.8 Croatia
* 7.9 Czech Republic
* 7.10 Denmark
* 7.11 Dominican Republic
* 7.12 Estonia
* 7.13 Finland
* 8 See also * 9 References
A Limited Liability Company (LLC) is a hybrid business entity having certain characteristics of both a corporation and a partnership or sole proprietorship (depending on how many owners there are). An LLC, although a business entity, is a type of unincorporated association and is not a corporation. The primary characteristic an LLC shares with a corporation is limited liability , and the primary characteristic it shares with a partnership is the availability of pass-through income taxation . It is often more flexible than a corporation, and it is well-suited for companies with a single owner.
In the absence of express statutory guidance, most American courts have held that LLC members are subject to the same common law alter ego piercing theories as corporate shareholders. However, it is more difficult to pierce the LLC veil because LLCs do not have many formalities to maintain. So long as the LLC and the members do not commingle funds, it would be difficult to pierce this veil. Membership interests in LLCs and partnership interests are also afforded a significant level of protection through the charging order mechanism. The charging order limits the creditor of a debtor-partner or a debtor-member to the debtor's share of distributions, without conferring on the creditor any voting or management rights. Limited liability company members may, in certain circumstances, also incur a personal liability in cases where distributions to members render the LLC insolvent.
FLEXIBILITY AND DEFAULT RULES
The phrase "unless otherwise provided for in the operating agreement" (or its equivalent) is found throughout all existing LLC statutes and is responsible for the flexibility the members of the LLC have in deciding how their LLC will be governed (provided it does not go outside legal bounds). State statutes typically provide automatic or "default" rules for how an LLC will be governed unless the operating agreement provides otherwise.
Similarly, the phrase "unless otherwise provided for in the by laws" is also found in all corporation law statutes but often refers only to a narrower range of matters.
The limited liability company ("LLC") has grown to become one of the most prevalent business forms in the United States. As the LLC's popularity has surged, unforeseen issues have emerged in these new statutes, particularly around single-member LLCs in Florida, New York, California, Colorado, and Georgia, where personal asset protection has been subverted.
Effective August 1, 2013, the Delaware Limited Liability Company Act provides that the managers and controlling members of a limited liability company owe fiduciary duties of care and loyalty to the limited liability company and its members. Under the amendment (prompted by the Delaware Supreme Court's decision in _Gatz Properties, LLC v. Auriga Capital Corp_, November 2012), parties to an LLC remain free to expand, restrict, or eliminate fiduciary duties in their LLC agreements (subject to the implied covenant of good faith and fair dealing).
Under 6 Del. C. Section 18-101(7), a Delaware LLC operating agreement can be written, oral or implied. It sets forth member capital contributions, ownership percentages, and management structure. Like a prenuptial agreement, an operating agreement can avoid future disputes between members by addressing buy-out rights, valuation formulas, and transfer restrictions. A written LLC operating agreement should be signed by all of its members.
For U.S. federal income tax purposes, an LLC is treated by default as a pass-through entity. If there is only one member in the company, the LLC is treated as a “disregarded entity” for tax purposes, and an individual owner would report the LLC's income or loss on Schedule C of his or her individual tax return. Thus, income from the LLC is taxed at the individual tax rates. The default tax status for LLCs with multiple members is as a partnership, which is required to report income and loss on IRS Form 1065. Under partnership tax treatment, each member of the LLC, as is the case for all partners of a partnership, annually receives a Form K-1 reporting the member's distributive share of the LLC's income or loss that is then reported on the member's individual income tax return. On the other hand, income from corporations is taxed twice, once at the corporate entity level and again when distributed to shareholders, thus more tax savings often result if a business formed as an LLC rather than a corporation.
An LLC with either single or multiple members may elect to be taxed as a corporation through the filing of IRS Form 8832. After electing corporate tax status, an LLC may further elect to be treated as a regular C corporation (taxation of the entity's income prior to any dividends or distributions to the members and then taxation of the dividends or distributions once received as income by the members) or as an S corporation (entity level income and loss passes through to the members). Some commentators have recommended an LLC taxed as a S-corporation as the best possible small business structure. It combines the simplicity and flexibility of an LLC with the tax benefits of an S-corporation (self-employment tax savings).
* Choice of tax regime . An LLC can elect to be taxed as a sole proprietor , partnership, S corporation or C corporation (as long as they would otherwise qualify for such tax treatment), providing for a great deal of flexibility. * A limited liability company with multiple members that elects to be taxed as partnership may specially allocate the members' distributive share of income, gain, loss, deduction, or credit via the company operating agreement on a basis other than the ownership percentage of each member so long as the rules contained in Treasury Regulation (26 CFR) 1.704-1 are met. S corporations may not specially allocate profits, losses and other tax items under US tax law. * The owners of the LLC, called "members", are protected from some or all liability for acts and debts of the LLC, depending on state shield laws. * In the United States, an S corporation has a limited number of stockholders, and all of them must be U.S. citizens; an LLC may have an unlimited number of members, and there is no citizenship restriction. * Much less administrative paperwork and record-keeping than a corporation. * Pass-through taxation (i.e., no double taxation ), unless the LLC elects to be taxed as a C corporation. * Using default tax classification, profits are taxed personally at the member level, not at the LLC level. * LLCs in most states are treated as entities separate from their members. However, in some jurisdictions such as Connecticut, case law has determined that owners were not required to plead facts sufficient to pierce the corporate veil and LLC members can be personally liable for operation of the LLC (see, for example, the case of _Sturm v. Harb Development_ ). * LLCs in some states can be set up with just one natural person involved. * Less risk of being "stolen" by fire-sale acquisitions (more protection against "hungry" investors ). * For real estate companies, each separate property can be owned by its own individual LLC, thereby shielding not only the owners but their other properties from cross-liability.
Although there is no statutory requirement for an operating agreement in most jurisdictions, members of a multiple member LLC who operate without one may encounter problems. Unlike state laws regarding stock corporations, which are very well developed and provide for a variety of governance and protective provisions for the corporation and its shareholders, most states do not dictate detailed governance and protective provisions for the members of a limited liability company. Thus, in the absence of such statutory provisions, the members of an LLC must establish governance and protective provisions pursuant to an operating agreement or similar governing document.
* It may be more difficult to raise financial capital for an LLC as investors may be more comfortable investing funds in the better-understood corporate form with a view toward an eventual IPO . One possible solution may be to form a new corporation and merge into it, dissolving the LLC and converting into a corporation.
* Many jurisdictions—including
* Effective in
* The District of Columbia considers LLCs to be taxable entities, thus eliminating the benefit of pass-through taxes—subjecting members to double taxation. Typically, LLCs will choose to be taxed as a partnership to avoid double taxation, which occurs in corporations. This allows companies to distribute their income among members who then report it on their personal tax returns. * Renewal fees may also be higher. Maryland, for example, charges a stock or nonstock corporation $120 for the initial charter, and $100 for an LLC. The fee for filing the annual report the following year is $300 for stock-corporations and LLCs. The fee is zero for non-stock corporations. In addition, certain states, such as New York, impose a publication requirement upon formation of the LLC which requires that the members of the LLC publish a notice in newspapers in the geographic region that the LLC will be located that it is being formed. For LLCs located in major metropolitan areas (e.g., New York City), the cost of publication can be significant. * The management structure of an LLC may not be clearly stated. Unlike corporations, they are not required to have a board of directors or officers. (This could also be seen as an advantage to some.) * Taxing jurisdictions outside the US are likely to treat a US LLC as a corporation, regardless of its treatment for US tax purposes—for example a US LLC doing business outside the US or as a resident of a foreign jurisdiction. This is very likely where the country (such as Canada) does not recognize LLCs as an authorized form of business entity in that country. * The principals of LLCs use many different titles—e.g., member, manager, managing member, managing director, chief executive officer, president, and partner. As such, it can be difficult to determine who actually has the authority to enter into a contract on the LLC's behalf.
* A Professional Limited Liability Company (PLLC, P.L.L.C., or P.L.) is a limited liability company organized for the purpose of providing professional services. Usually, professions where the state requires a license to provide services, such as a doctor , chiropractor , lawyer , accountant , architect , landscape architect , or engineer , require the formation of a PLLC. However, some states, such as California, do not permit LLCs to engage in the practice of a licensed profession. Exact requirements of PLLCs vary from state to state. Typically, a PLLC's members must all be professionals practicing the same profession. In addition, the limitation of personal liability of members does not extend to professional malpractice claims. * A Series LLC is a special form of a Limited liability company that allows a single LLC to segregate its assets into separate series. For example, a series LLC that purchases separate pieces of real estate may put each in a separate series so if the lender forecloses on one piece of property, the others are not affected. * An L3C is a for-profit, social enterprise venture that has a stated goal of performing a socially beneficial purpose, not maximizing income. It is a hybrid structure that combines the legal and tax flexibility of a traditional LLC, the social benefits of a nonprofit organization, and the branding and market positioning advantages of a social enterprise. * An Anonymous Limited Liability Company is a LLC where ownership information is not made publicly available by the state where the LLC is registered. This is done by using a third-party to act as the organizer and registered agent of the LLC. Level of anonymity varies with different states.
_ It has been suggested that this section be merged into Private limited company _. (Discuss ) _Proposed since December 2014._
Companies with limited liability exist in business law worldwide. However, the limited liability company is a specific legal structure defined by the laws of U.S. states, with quite distinct characteristics. Many other countries have similar structures.
In Albania a limited liability company (Albanian : _Shoqëri me përgjegjësi të kufizuar Sh.p.k_) is a commercial company founded by persons of physical or judicial status, who are not liable for the company and personally bear losses only up to the outstanding contribution agreements. Partners' contributions constitute the registered capital of a limited liability company. Each partner has his quota in the company in proportion to the contribution of the capital so the registered capital of the company is divided between the partners based on the proportional ratio of their contribution. In Albania a limited liability company may not have a capital of less than 100 lek .
Although not an exact equivalent, the Argentine variant of the LLC is called _Sociedad de Responsabilidad Limitada (S.R.L.)_ and it limits the liability of its members up to their capital contribution in the company. The equity is divided into equal stakes (can not be called "shares"), each one of which represents a percentage of the company and that can not be traded on the stock exchange. Their by-laws are regulated by law N° 19550 and the commercial partnership is limited to a maximum of 50 partners.
BOSNIA AND HERZEGOVINA
Bosnian and Herzegovinian legislation, similarly to that in Serbia, Montenegro, Macedonia contemplates LLCs as _društvo s ograničenom odgovornošću_ (d.o.o.). Companies using this structure append the abbreviation d.o.o. to their company name. A shareholder or member in a d.o.o. is only personally liable up to the value of the member’s investment in the company.
The corporate structure in Brazilian law most similar to the American LLC is the _Sociedade Limitada_ (“Ltda.”), under the new Brazilian Civil Code of 2002. The _sociedade limitada_ is the new name of the _sociedade por quotas de responsabilidade limitada_, and it can be organized as _empresária_ or _simples_, under this new code, roughly corresponding to the form types of _comercial_ (“commercial”) and _civil_ (“non commercial”) of the Commercial Code. A new law in Brazil has made it legal to obtain an LLC by a sole-proprietor called _Empresa Individual de Responsabilidade Limitada_ (_Eireli_ for short). The main requirement is a capital of 100 times the current minimum wage , R$ 78.800,00 (US$26.267.00) as of 2015.
Bulgarian legislation contemplates LLCs as _Дружество с ограничена отговорност_ (_Druzhestvo s ogranichena otgovornost_; Limited liability company). Companies working under this structure append the abbreviation _ООД_ (OOD) to their name. In case of an LLC with individual owner it is contemplated as _Еднолично дружество с ограничена отговорност_ (_Ednolichno druzhestvo s ogranichena otgovornost_; One-man/ Single-member limited liability company) and abbreviated as _ЕООД_ (EOOD).
Chilean law contemplates a certain form of LLC known as "Sociedad de Responsabilidad Limitada" (Limited Liability Association). Also (LLC) These companies are regulated by law N° 3.918. Among their most important characteristics we can say that:
* They can pursue a commercial or non-commercial purpose (Sociedad Comercial de Responsabilidad Limitada / Sociedad Civil de Responsabilidad Limitada). * They must be formed by two or more partners and can hold up to a maximum of fifty. * Their equity is divided into "cuotas" (not shares) each one of which represents a percentage of the company. * They can be managed by one or more managers (external if need be), or by a board of directors. * Their by-laws can't be modified, nor their partners be changed, without the consent of all the other partners. * In tax considerations, they differ from the LLC's because they pay a corporate tax for their income, amount that can be deducted by their owners as a credit against the taxes they pay.
Chilean law also contemplates a very special kind of individual owner LLC called _Empresa Individual de Responsabilidad Limitada_ (Limited Liability Individual Company), which uses the E.I.R.L. abbreviation.
Colombian legislation contemplates a very similar structure as mentioned above in the Chilean case. The _Ltda._ abbreviation is also used in Colombia.
In Croatia, a private limited liability company is termed _društvo s ograničenom odgovornošću_ (literal: limited liability company), abbreviated _d.o.o._. A public limited liability company is termed a _dioničko društvo_ (literal: joint stock company) abbreviated _d.d._.
Czech legislation contemplates LLCs as _společnost s ručením omezeným _ (_s.r.o._ or _spol. s r.o._). An _s.r.o._ is not technically comparable to an LLC because the profits are still subject to double taxation. Czech law does not offer a possibility to start up a limited company without the possibility of avoiding double taxation. As of 2014 the liability is not limited in Czech, since managing director (_jednatel_, mandatory board member in Czech LLCs) bears full liability that extends to all of his/her property, including private one.
The Danish form of the LLC is the _kommanditselskab _ (K/S). There is no minimum capital requirements. In a K/S there are two types of shareholders, the _komplementar_ which is fully liable, and the _kommanditist_ which liability is limited. The K/S is a tax-transparent company, which means the income "passes through" the company directly to the shareholders.
Dominican Republic legislation contemplates LLCs as _Sociedad de Responsabilidad Limitada_, also known by their abbreviation _S.R.L.;; S.R.L.s award limited liability to their members up to their contribution in the company (i.e., contribution of capital). This type of company began after the law number 479 of the year 2008._
In Estonia, a limited liability company is referred to as _osaühing_ (OÜ). The type of entity is also required to be identified in the name. An OÜ is taxed as a corporation. The minimum capital required by law is €2,500.
Although not an exact equivalent, the Finnish version of the LLC is the Oy (osakeyhtiö) or in Swedish Ab (aktiebolag). An Oy is taxed as a corporation. The minimum capital required by law is €2,500.
Because of its hybrid characteristics it is very difficult to
determine the German equivalent. On one hand it is possible to
consider it as a kind of _
Gesellschaft mit beschränkter Haftung _
(GmbH) because it has aspects of a corporation ; on the other hand it
could be considered to be a kind of _
According to Icelandic legislation, there are two types of LLC forms, private and public held limited liability forms. Private LLC is abbreviated "Ehf." The minimum capital of 500,000 Icelandic krónas (kr.). Public LLC is abbreviated "Hf." with minimum capital of 4,000,000 kr and goes to LLC.
Commonly used business forms in
(a) Public and Private Limited Companies - Incorporated entities with limited liabilities. These are very similar to "Corporations" under U.S law.
(b) Limited Liability Partnerships (LLPs) - Incorporated entities with limited liability. The LLPs are organized as partnerships - they do not have a Board of Directors as such. LLP has lesser compliance requirements compared to Private limited companies. There is no maximum limit for the no. of partners in LLP. In the private limited company shareholders are limited to the extent of 200 shareholders.
The above entities are treated as taxable entities ("persons"), and as such are liable to tax on their incomes. These entities do not offer "pass-through" taxation benefits, unlike LLCs in the USA.
As of 2015, there are seven types of companies which can be registered under Iran's company registration law. One of these seven types of companies and partnerships refers to LLPs. Like many other countries, two persons are required to form an LLP in Iran. Each person has his/her own shares and is responsible for business liability equivalent to his/her share percentage. LLPs in Iran are named according to the format illustrated by the following example: "Sherkat Ba Masooliyate Mahdood" translates as "Sherkat شرکت Company" + "Mahdood محدود Limited" + "Masooliyat مسئولیت Liability".
The Italian Civil Code, approved in 1942 and as amended by the Government Act 6/2003 and furthers modifications, mainly provides three forms of limited liability company:
* _Società per azioni_ (S.p.A.): the minimum required starting capital for an SpA is €50,000. The capital is divided into shares (azioni) that can be transferred by endorsement or bought and sold on stock exchange. Only SpAs can be quoted in stock exchange market, issue corporate bonds, and other financial instruments. SpA form and a higher capital are required by law to operate in protected businesses (i.e. banks, leasing companies, etc.). * _Società a responsabilità limitata_ (Srl): the minimum required starting capital for an Srl is €10,000. Its capital is divided into stakes (quote) which can be bought or sold just by notarial act. Srls can issue corporate bonds but are subject to many limitations. Similar to the Srl is the Società Cooperativa a Responsabilità Limitata (Scarl) whose scope is not making profit but give benefits to stakes' holders. * _Società in accomandita per azioni_ (Sapa): the minimum required starting capital for a Sapa is €120,000 divided into shares. Sapas have a mixed liability scheme, where standard shareholders have limited liability while managing shareholders have full liability. Except this, SAPAs are exactly like SPAs even if uncommon.
Companies append the corresponding abbreviation to their company names.
Japan passed legislation in 1996 creating a new type of business organization, godo kaisha (J-LLC), a close variant of the American LLC. Japanese Tax authority does not consider J-LLC (Godo-Kaisha) a pass-through entity, but as a taxable entity.
MACEDONIA, REPUBLIC OF
Macedonian legislation contemplates LLCs as _Друштво со ограничена одговорност_ (_Drushtvo so ogranichena odgovornost_). Companies working under this structure append the abbreviation _д.о.о._ (_d.o.o._) to their name. The minimum required starting capital for a d.o.o. is €5,000.
Mexican legislation contemplates LLCs as _Sociedades de Responsabilidad Limitada_, also known for their abbreviation "S. de R.L.". S. de R.L.'s award limited liability to its members up to their contribution in the company (i.e., contribution of capital) and also act as pass-through or flow-through entities whereby profits are "passed-through" to its members, avoiding double taxation. This type of company is widely used by foreign investors in Mexico because of its "pass-through" modality and its "check the box" capability under the IRC (Internal Revenue Code of the U.S.).
Moldovan legislation contemplates LLCs as _Societate cu Răspundere Limitată_, abbreviated "S.R.L.", and are regulated member(s)-founder(s), and other non-founder members, minimum one member-founder and maximum total of 50 members, at least one of them must be the founder of the company, but all of the 50 could be also founders.
The Securities and Exchange Commission of
There is no direct equivalent of an LLC in Peru, but some similar corporate forms include:
* _Sociedad anónima cerrada_ (SAC), a corporation which must have at least two and not more than twenty shareholders; its shares may not be offered to the public and cannot be traded on the stock exchange. * _Sociedad comercial de responsabilidad limitada_ (SRL), a commercial partnership divided in equal participations which may not be called "shares". It must have at least two and not more than twenty partners. * _Sociedad civil de responsabilidad limitada_ (S civil de RL), a professional partnership of at least two and not more than thirty individuals, with co-owner participation in the form of capital, of professional contribution, or of any combination of both. * _Empresa individual de responsabilidad limitada_ (EIRL), a legal entity with one single owner.
The capital for any of the above entities is freely determined by its statutes. There is no minimum requirement except for entities with certain types of activities, mainly in the financial markets, and then irrespective of their type.
In Poland, a limited liability company is referred to literally as “company with limited liability” (_spółka z ograniczoną odpowiedzialnością _, legally abbreviated as _sp. z o.o._ (or sometimes _Sp. z o.o._ in particular names). Informally, in the Polish speaking slang, it is abbreviated as _spółka zoo_ (pronounced with a long "o", as in "tow."). However, _sp. z o.o._ has a (separate from its owners) legal personality, which gives it the ability to do certain actions under law, and it is considered a "corporation".
The minimum start capital is 5,000 PLN (since 2009; until then, 50,000 PLN).
In Portugal, LLCs are called "_Sociedades de Responsabilidade Limitada_", that is, "company of limited responsibility", usually abbreviated _Lda._. They are tax subject, and company shares cannot be sold in a public market, since 2006 the transference of them is not required to be done in the presence of a civil law notary , except if the company owns buildings, in the same way other major properties have to be sold. Nonetheless, the responsibility of the partners is limited to the capital share they hold, and the minimum capital required by law for a _Lda._ of €5000. (In 2006 the PS Government, led by José Socrates, did reduce the minimum capital to €1, but in 2011 the new PSD Government, led by Pedro Passos Coelho, reinstated the €5000 minimum capital.) The capital is not required to be deposited at the time of the registration of the company, instead the share holders have until 31 December of the year the registry was made.
Romania recognizes the limited liability company since 1990 under the name of _societate cu răspundere limitată_ (S.R.L.), in which the owners are personally liable for the company obligations within the limit of their contribution to social capital. The minimum start capital is 200 RON which currently amounts to less than €50.
In Russia and certain other former Soviet countries, an entity with a somewhat similar structure is known as Общество с ограниченной ответственностью (Obshchestvo s ogranichennoy otvetstvennost'yu) (lit., "company with limited liability"), usually abbreviated OOO, or in some CIS countries as OсOO.
Although a Russian limited liability company shares the same name with an American LLC, it is different in many ways. Most importantly, a Russian LLC is not tax transparent: the company is taxed at the corporate level, and then, upon distribution of dividends, shareholders pay income tax (personal or corporate).
A limited liability company is the most popular form of legal undertaking in Russia for simple shareholding structures.
The minimum capital required is 10,000 Russian rubles .
Serbian legislation contemplates LLCs as _društvo sa ograničenom odgovornošću_. Companies working under this structure append the abbreviation _d.o.o._ or _DOO_ to their name same as in Croatia. As in the Czech Republic, a _d.o.o._ is not technically comparable to an LLC because the profits are still subject to double taxation. In Kosovo a company does not need to provide proof for payment of capital.
In Slovakia, the law contemplates _spoločnosť s ručením obmedzeným _ (abbreviation _spol. s r. o._ or _s. r. o._) or as the rough equivalent of a limited liability company. It is very popular form of business organization due to ensurance of limited liability in exchange for a relatively small investment into the registered capital. From one to 50 associates can found it through a founding agreement with minimum registered capital of €5000, minimum €750 per person, in money or other property. (§ 105–153 of Act. No 513/1991 Coll. – Commercial Code as amended.)
Slovenian legislation contemplates LLCs as _družba z omejeno odgovornostjo_. Companies working under this structure append the abbreviation _d. o. o._ to their name. The minimum required starting capital for a _d. o. o._ is €7,500. Due to the high cost and complicated bookkeeping of a real corporation, this is a more widespread form.
In Spain, LLCs are called _Sociedad de responsabilidad limitada_ (SRL), "company of limited responsibility", or _sociedad limitada_ (SL), or "limited partnership". They are tax subject, and company shares cannot be sold in a public market, the transference of them having to be done compulsorily in the presence of a civil law notary, in the same way other major properties have to be sold. Nonetheless, the responsibility of the partners is limited to the capital share they hold, and the minimum capital required by law for a _S.L._ is at least €3,000.
Sweden has no equivalent of an LLC. The closest company form is the _handelsbolag_ (lit.: "trade company"). The Swedish AB (_aktiebolag_; lit.: "share company"), like the _handelsbolag_, is a tax subject and is more similar to a US C Corporation than an LLC. The minimum capital required by law in a private company, _privat aktiebolag_, is SEK 50,000, although this may be in the form of assets as well as capital. It should be noted that the AB structure requires shareholders, a Board of Directors, and regular meetings of both, together with complete accounts once per year. Depending on the size of the AB, the accounts may have to be audited. Creation or purchase "off-the-shelf" of an AB is relatively cheap and tax effective, but liquidation of a created _aktiebolag_ can be an expensive and time-consuming operation. Creation of public limited liability companies, or _publikt aktiebolag_, which can raise capital from the public, requires a minimum capitalization of SEK 500,000, however the overall regulation of public companies in Sweden, especially regarding accounting methods and taxes, is thorough and detailed.
The Swiss Code of Obligations provides for different kinds of companies with limited liability, the two most commonly used are:
Swiss Limited Liability Company: The terms for this kind of company
used in the three official languages of the
Corporation (in English common law context usually translated
as _company limited by shares _): The terms for this kind of company
used in the three official languages of the
In Tajikistan, the same as in Russia, an entity with a somewhat similar structure is known as "Ҷамъияти дорои масъулияти маҳдуд", Chamiyti Doroi Masuliyti Machdud, abbreviated as "ҶДММ".
Minimum capital should be 10,000 TL. That capital could be the minimum total capital of company. Number of founding shareholders (real persons or legal entities) could be minimum 1 and maximum 50. All or some of the shareholders could be foreign nationals. There is no issued stock certificates and all shareholders liability is limited to their registered capital amount. 1/4 of capital should be blocked in a Bank until procedure of registration ends. The equivalent of LLC for Turkish is Ltd. Şti. (Which means _Limited Şirketi.)_
This type of entity has existed in
By Ukrainian law LLC is a legal person . Authorized capital of LLC is
divided into shares (or stakes), the amount of which is determined by
the charter. LLC is responsible to the creditors only with its assets.
Legal entities (foreign or Ukrainian companies) individuals,
regardless of their country of citizenship or residency can be the
founders (participants) of LLC.
Limited liability company can be
formed either by one person or by several individuals or legal
entities (corporations). Maximum number of participants (founders) of
By Ukrainian Law LLC dividend payment is possible after the declaration of company’s income or profit to the fiscal/tax authorities and the approval of the income statement. Thus, regardless of the tax system, LLC can make dividend payments up to 4 times a year, or one time a quarter.
Taxation. _LLC can be registered:_
— as corporate/profit tax (18% rate) with or without
— fixed tax rate (in transliteration "yediniy podatok" or
"sproschena sistema opodatkuvannia") is a 5% rate from revenue, with
or without (on request)
UNITED ARAB EMIRATES
A Limited Liability Company (LLC) is the most common type of registration in the UAE and is recommended where the purpose of the entity is to make sales within the region. However, it should be noted that 100% foreign ownership of such an entity is not permitted. Under the UAE Commercial Companies Law (CCL), foreign investors are permitted to hold up to 49 per cent equity ownership in UAE companies and 51 per cent of the equity must be held at all times by one or more UAE nationals. In accordance with Article (218) of the CCL a Limited Liability Company can be formed by a minimum of 2 and a maximum of 50 shareholders whose liability is limited to their shares in the capital of the company. Recent amendments to Article (217) of the CCL that came into force in June 2009 removed the requirement for minimum share capital (previously AED 300,000 in Dubai and AED 150,000 in other Emirates) allowing founders of a limited liability company the freedom to determine the company’s share capital which could be less than the earlier prescribed bottom line. Shares of an LLC are not open for subscription by the public. Despite the split in shareholdings, profits may be divided in other ratios agreed upon, taking into consideration efforts of foreign partners in management, provision of technology or expertise. Responsibility for the management of a LLC can be vested in the foreign partner or UAE national partners or a third party. A LLC must appoint a minimum of one manager and up to a maximum of five managers for the business. Managers must be appointed by a Memorandum of Association or by a management contract, for a fixed term or an unlimited term. Unless the Memorandum of Association states otherwise, the manager has full powers of administration and management of the LLC. LLC is not allowed to practice its activities in the UAE without a Trade License and Commercial Registration Certificate.
The new form of limited liability partnership (LLP), created in 2000,
is similar to a US LLC in being tax neutral: member partners are taxed
at the partner level, but the LLP itself pays no tax. It is treated as
a body corporate for all other purposes including
A limited liability company (LLC) is a relatively new business
structure authorized by state statutes . The LLC is chiefly inspired
by the GmbH ("
Company with limited liability"), a type of business
In the United States, the first limited liability company act
A potential disadvantage specific to the United States is that LLCs are not considered to be corporations for the purposes of federal civil procedure ; they are instead treated as partnerships. This affects the applicability of diversity jurisdiction in cases involving LLCs, barring application of diversity jurisdiction when even one member of the LLC is a citizen of the same state as one of the opposing parties. Should one member of an LLC be a citizen of a state of which one of the opposing parties is a citizen, any case between the LLC and those parties must be heard in that state's courts; corporations enjoy a more complete legal personhood that only denies diversity jurisdiction when the opposing party is a citizen of the state in which the corporation is incorporated (most commonly Delaware for large corporations, which has a small population) or has its principal place of business.
AOL was set up as an LLC during its ownership by Time Warner from 2001 to 2008. There is a similar setup for BMW 's American subsidiary, BMW of North America, LLC. Chrysler has been an LLC since restructuring during the auto industry bailout of 2009 , owned by Fiat Chrysler Automobiles N.V. .
* _ Besloten vennootschap met beperkte aansprakelijkheid _, a Belgian (bvba) and Dutch (bv) private limited company * _ Société à responsabilité limitée _, LLCs in French speaking countries * Incorporation (business) * Limited Liability Partnership (LLP) * List of company registers * Types of business entity * Wholly Foreign-Owned Enterprise
* ^ "What is a Limited Liability Company?". _Nolo.com_. Nolo .
Retrieved 29 October 2014.
* ^ "What is an LLC?". _limitedliabilitycompanycenter.com_. LLC
Center Publications LLC. Retrieved 19 December 2016.
* ^ McCray, Richard A.; Thomas, Ward L. "Limited Liability
Companies as Exempt Organizations" (PDF). IRS. Retrieved 22 April
* ^ Murray, Jean. "PLLC--Professional Limited Liability Company".
_About.com_. Retrieved 22 April 2014.
* ^ "What is "Piercing the Corporate Veil"". _Law 4 Small
Business_. 21 May 2015. Retrieved 3 September 2016.
* ^ See Del. Limited Liability
Company Act § 18-607(b)
* ^ PLLC, Zamzow. "Zamzow PLLC Law Firm • Attorneys - Grand
Rapids, MI - Legal Service". Retrieved 31 May 2016.
* ^ "DLA Piper Global Law Firm".
* ^ "Delaware LLC Agreement Pre-Flight Checklist - IncNow". 25 June
2015. Retrieved 31 May 2016.
* ^ "Instruction SS-4 (Rev. January 2011)" (PDF). Retrieved
* ^ Presti and Naegele FAQ: What are the pros and cons of limited
liability companies (LLCs)?
* ^ "Form 8832 (Rev. January 2011)" (PDF). Retrieved 2012-01-04.
* ^ "Tax Advantages of Corporations - Updated for Tax Year 2015".
TurboTax. Retrieved 2016-08-29.
* ^ _Sturm v. Harb Development_, 298 Conn. 124, 2 A.3d 859 (2010),
* ^ "District of Columbia LLC DC LLC, District of Columbia
Limited Liability Company". Incfile.com. Retrieved 2012-01-04.
* ^ For example,
HMRC in the
United Kingdom , see
HMRC Tax Manuals,
* ^ "Who Can Own an LLC". The-llc-company.com. Retrieved 5 May
* ^ "Maintaining Your Privacy with an Anonymous LLC". Law 4 Small
Business. Retrieved 29 August 2016.
* ^ "Format ligjore të shoqërive - Acitad".
* ^ Ley de Sociedades Comerciales (Spanish)
* ^ "Lei 12.441/11" . _Brazilian Chief of Staff_ (in Portuguese).
July 11, 2011. Retrieved May 9, 2015.
* ^ "Veja o valor do salário mínimo em 2015" . _g1.com.br_ (in
Portuguese). January 1, 2015. Retrieved May 9, 2015.
* ^ Commerce Law of Bulgaria, English translation, Chapter 13,
Section I, Article 116 Archived 16 June 2010 at the
Wayback Machine .
* ^ Código de Comercio de Colombia, just like S.A..
* ^ "Screening report : Croatia" (PDF). ec.europa.eu. 18 December
2006. Chapter 6 –
Company Law, section IIa.
Company law, p.3.
* ^ Limited Liability Companies Act 2006 (English translation)
* ^ _Steuerliche Einordnung der nach dem Recht der Bundesstaaten
der USA gegründeten Limited Liability Company_.
* ^ _A_ _B_ "Historical Background of the Limited Liability
Company". Llc-reporter.com. Retrieved 2012-01-04.
* ^ Σκουζός, Ιάσων. "Procedure for the incorporation of
a Greek Limited Liability
Company (E.P.E.) - Iason Skouzos & Partners
- Law Firm". Retrieved 31 May 2016.
Company type and name English. Investhk.gov.hk (2012-07-27).
Retrieved on 2013-07-19.
* ^ "Hungary KFT". Zenron Consulting. Retrieved 29 October 2014.
* ^ "
Company Conversion into LLP In
* v * t * e
Private equity and venture capital
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